Denmark, the EU’s biggest oil producer, has announced that it will not grant any more licences for gas or oil exploration in the Danish North Sea. The decision has been taken to help the country meet its ambitious target of a 70% reduction in greenhouse gas emissions by 2030 and to become carbon neutral by 2050.
Current production will continue across the 55 existing oil and gas platforms but even this drilling and extraction will come to an end by 2050. Denmark produced the equivalent of 103,000 barrels of oil a day in 2019 – still significantly less than Norway or the UK but the biggest producer within the EU bloc.
The Danish climate minister, Dan Jørgensen said on December 4th that the “decision will resonate around the world. We are now putting a final end to the fossil era”. It is estimated by the Danish government that the decision will mean a loss in revenue to the state of about 13 billion kroner (about £1.6bn).
Mr. Jørgensen added that since the country first became involved in North Sea fossil fuel production during the 1970s, the revenues accrued have “to a large extent financed our welfare state”. That the Danish government is content to forego this revenue stream is not a major surprise as the country has been a forerunner in switching to clean energy sources.
Dong Energy, the former state oil company, was rebranded to Ørsted in 2017 following the sale of its oil and gas business to Ineos. Having invested massively in building offshore wind farms, they are now the largest offshore wind farm company in the world and are also rated the most sustainable company in the world.
The decision was lauded by Helene Hagel from Greenpeace Denmark as “a watershed moment”. She added that Denmark can “inspire other countries to end our dependence on climate-wrecking fossil fuels”. The country’s green credentials are manifest across the nation with Copenhagen aiming to be carbon-neutral by 2025.
Always an outward-looking country, the climate minister is also pleased to see the imminent transfer of presidency in America. He expressed “total confidence that the Joe Biden administration will bring huge progress” and expects to see “new momentum” as the world acts to reduce the impact of climate change.